Jacksonville's web.com is bustling with energy and success

Wednesday

Aug 29, 2012 at 2:45 PM

Drew Dixon

As AC/DC's "Live Wire" rocked web.com's sales department, a head would occasionally pop up from the cubicles to announce another sale.

The department almost resembles party central, with colored streamers hanging from the ceilings and music blaring through the office. And why not? These are electric times for the Jacksonville-based company, which provides website design and online marketing strategies to small businesses.

"There's definitely a buzz within the community," said Michael Munz, a vice president of Dalton Agency, a local advertising and public relations firm.

The "buzz" is what happens when a firm exceeds expectations the way web.com has, Munz said.

Revenues in the second quarter this year more than doubled from the same time period last year, from $42.2 million in 2011 to $98.9 million in 2012. Part of that was due to the October acquisition of Network Solutions in Herndon, Va., which had $264.9 million in revenue in 2010.

On the flip side, web.com reported a $19.05 million net loss under its cash flow report for the same quarter due to the acquisition. A July press release said the company intends to continue using its cash flow to pay down debt.

A fixed business plan also is contributing to the rise of web.com.

With some 3 million customers, the company can't afford to provide custom modifications for each account's website and Facebook page. Web.com instead takes more of an industrial approach to a digital commodity.

"The key for longevity and growth is to provide the service profitably," said Susan Datz Edelman, director of web.com's corporate communications. "Our 'secret sauce' is the workflow system we've created, which is actually more of a manufacturing format."

Digital industry analysts say while that production-line paradigm may have given rise to web.com's success, it also may be a vulnerability.

Kevin Morris is the managing member of The Vivid Agency in Jacksonville, which specializes in digital marketing for small to medium-size businesses. He said the "cookie cutter" approach may be web.com's soft underbelly.

"We look at web.com as the Wal-Mart of websites," Morris said Friday. "It's a templated website. It's very generic. It's developed with entry-level resources. … They do not take the business objective of their client to heart."

Making web pagesThe third floor of web.com's four-story headquarters on the Southside, where many of the Internet developers, producers and writers work, is a hub of energy. Big screen TVs display some of the websites the company has developed while other screens show live notices indicating how long customers have been on hold on the phone.

It keeps employees moving to the customers who need it most, managers say.

Web.com Chief Executive Officer and founder David Brown said the company is a live wire. With some 500 employees in Jacksonville and 1,400 more spread out over five states and Canada, the company projects to generate nearly $500 million in annual revenues by the end of this year, well above the 2011 figure of $234.4 million in revenues.

"At the time that we started the company [in 1997], our mission was the same mission," Brown said. "But we didn't really have any grand illusions."

The concept of helping small business is grass-roots and the cost to a small business is a modest $100 per month. Web.com makes its money on the sheer volume. But churning out formatted web pages has its drawbacks.

Morris said that in a previous job, he hired about a half dozen former employees from web.com.

He said those employees described web.com as a "high pressure" sales environment that lacks imagination.

"It's more of a factory environment, not large in creativity," he said. "… "Doing anything that is not tailored and not focused to the business does not capitalize on the strengths of digital marketing itself."

Roseann Duran, the company's chief people officer, similar to a human resources manager, believes there is plenty of creativity at web.com. The company hires young, talented employees that may not have a lot of technical skills at first, but they are molded to the web.com paradigm, which provides upward movement to employees who exhibit creativity, she said.

The other land mine, Morris said, is keeping up with technological innovation. That's where a lack of out-of-the-box thinking could really hurt a company that mass produces web pages.

"Web.com's going to have to adapt and change to technology and the market," Morris said. "As anyone in the industry knows, digital marketing changes on a daily basis."

Loyal customersBut with millions of customers, web.com has struck a chord with small business owners who don't want to pay for a full-on marketing campaign. Some of those customers are fiercely loyal.

Patricia DiBona owns her own graphic design studio and jewelry sales in Buford, Ga., outside of Atlanta. She started using web.com in 1997, back when it was called Atlantic Teleservices.

"They own their own software that they use to build a website," said DiBona. "You have the ability to upload photos, upload items and add pages without having to know any of these fancy programs."

University of North Florida economist Paul Mason said web.com's main challenge will be keeping focus.

"Building websites is something a lot of companies do, and they're mostly very small and do a few at a time," Mason said. "Web.com has kind of institutionalized it as a bigger supplier."

Duran said the trick now is to avoid the pitfalls of company-wide hubris.

"It could all go away tomorrow if we make mistakes," Duran said. "Everybody is given very specific goals that they must meet. That's what people focus on so they don't focus on the stock price or the next acquisition."

Of course, success breeds copy cats, Mason said.

"Basic economic theory tells us that if a company's successful, other companies want to enter the market so they can reap some of those profits, too, and as a result it drives down profits and it reduces the profits for everybody."

drew.dixon@jacksonville.com, (904) 359-4098

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